Friday, April 15, 2011
- No work yet in oil patch, but you're hired

NATHAN VANDERKLIPPE - The Globe and Mail

Canada’s oil patch is resorting to increasingly unusual measures to secure workers ahead of a coming labour shortage, with one company hiring engineers before work is available and another resorting to a province-wide electronic blitz.

Triple-digit oil prices have fuelled a substantial comeback in Alberta, which has seen its unemployment rate tumble as employers brought back nearly 70,000 jobs over the past year.

Propelling the surge is a major return to the oil sands, where companies have renewed stalled projects and begun multibillion-dollar new ones. Advances in drilling technology have also sparked a rush to develop new non-oil sands resources in so-called “tight oil” plays. Together, they have created so much work that companies are scrambling to find workers in hopes they won’t be caught by the same shortages that hurt industry in the last boom three years ago.

Engineering firm IMV Projects, for example, has since January added 100 people to its 500-person work force. That’s down from its 2008 peak of 800, but the company is not done yet. It is still hiring 10 to 25 people a week. Many are being signed on for work that doesn’t yet exist. The company believes Calgary’s looming engineering need is so large, it won’t have to worry. So far, it says, new work has showed up by the time the workers do.

“We have enough indicators that say there will be enough work to go around, and it will be a matter of who has the best people to put the best teams forward in front of clients,” said Kevin O’Brien, the company’s president.

Scooping up the best available talent has taken on even more significance this time around, given the problems the industry experienced last time around, Mr. O’Brien said.

Labour problems played a major role in the dark side of the province’s last boom, which included soaring costs and, sometimes, shoddy workmanship that produced significant operational problems once projects were built.

Oil sands companies have since moved to divide construction of new projects into smaller chunks that can be stopped and started according to worker availability. They have also moved to cap the number of labourers they need on individual projects.

But those efforts have come up against the sheer number of projects emerging to pull crude from the oil sands and other prospective new oil plays, which are soaking up available workers by the thousands. Alberta’s unemployment rate has fallen to 5.7 per cent from 7.4 per cent a year ago. Adult unemployment remains double what it was in 2006 to 2008, but is well below the current national average of 7.7 per cent. The province has now soaked up more than two-thirds of the jobs it lost in the recent downturn.

The need for talent is growing serious enough that Flint Energy Services Ltd. is working with the Province of Alberta to launch an unprecedented appeal for workers.

On Wednesday, it has planned its first virtual job fair that will see human resources personnel use Internet video technology to simultaneously market the company’s staffing needs to 40 government offices across the province. Flint is looking to hire 2,000 this year, in positions from project managers to truck drivers. The company expects to double its work force to a total of 10,000 over the next half-decade.

Still, companies say it’s too early to say a labour crunch has already arrived. IMV, for example, held a job fair in January. A thousand people showed up.

And though industry has worried that workers would not return to the oil patch after the last downturn, which saw an estimated 3,000 engineers lose jobs in Calgary, statistics suggest otherwise. Membership in the Association of Professional Engineers, Geologists and Geophysicists of Alberta has continued to rise, with a 5-per-cent increase in 2010.

Demand for those professionals is now strong enough that engineers’ salaries, which saw cuts as deep as 20 per cent in the past two years, have now returned to their record highs from 2008.

“Stories from our members suggest that things are really tightening up now,” said Neil Windsor, the association’s executive director. “And it’s going to get nothing but worse as even more projects start to grow.”

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